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NEW YORK: Auto Insurers File Fraud Suit Against Docs

A group of 15 New York-area physicians has been accused of a massive billing scheme where they sold their medical licenses to "scam artists who used them to set up" fraudulent companies that billed insurers for millions of dollars, the Washington Post reports. Brought on by Geico, Progressive Corp., Allstate Corp. and New York Central Mutual Fire Insurance Co., the suit alleges that physicians would sell the use of their credentials for a fee of $4,000 to $5,000 annually to people setting up medical professional corporations. Those corporations would then bill insurers for automobile accident-related injuries. In New York State, only physicians can own medical professional corporations. Seeking $60 million in damages, the suit names 14 doctors, 47 medical professional corporations, 15 management companies, 26 chiropractors, five non-doctors and one former doctor as defendants (Crenshaw, 3/15).

Out to Steal, Not Heal The suit alleges that the clinics "conducted unnecessary tests on car accident victims, billed insurers for services they never performed and charged doctor-level fees for work done by chiropractors and physical therapists." Many of the physicians who "owned" the companies "rarely, if ever, visited the centers" (Ingrassia, New York Daily News, 3/15). In some cases, a $30 chiropractor visit was billed at the more expensive $100 physician rate (AP/Newsday, 3/15). In a press conference yesterday, Vince Coyne, manager of special investigations at Progressive, said, "These doctors were not out to heal, they were out to steal." He added that physicians in other states were participating in similar schemes (Fields, Bergen Record, 3/15). Charles DeRienzo, director of the Insurance Fraud Bureau of the New York State Insurance Department, said, "We have to look into these medical companies and see ... We are looking into the possibility of a criminal lawsuit" (AP/Newsday, 3/15).

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